Create and Use an Employee Expense Account

An expense account is a financial allowance offered to employees to cover business expenses. Employees pay for business related goods and services with the understanding that they will be reimbursed. This makes it easier for personnel who travel and/or entertain clients to conduct business that helps your company grow. It is in your company’s best interest to establish a clear expense policy, share it with your employees and then regulate it often and fairly.

Write an Expense Account Policy

Take the time to write a complete and comprehensive expense account policy.

 

  • Use clear and precise language to avoid misinterpretation or confusion.
  • Divide the policy into sections for easy and quick reference.
  • Itemize carefully what is allowed and what is not allowed.
  • Include details regarding expected rates, limits, what requires preauthorization, when receipts are needed.
  • Use examples to increase clarity.
  • Take into account all possibilities; accommodation, travel, mileage, food, alcohol, entertainment, business purchases, subscriptions, donations, computer hardware, software, equipment, etc.

 

Once the policy is complete, make it available to employees and management. Consider a hard copy and a copy online. Make time for questions and feedback. Continually review and refine the policy.

Develop an expense report and reimbursement process

A strong expense report procedure will speed the process of reimbursement and reduce expense leakage.

  • Create an expense report template which requires all pertinent information; date of purchase, category (i.e. accommodation, food), amount, point of purchase and preauthorization (if required).
  • Consider separate templates for each department customized to their needs.
  • Generate a separate mileage template for travel.
  • Reimburse purchases and expenses quickly checking them against the policy.
  • Set expense deadlines and compensate staff on their payday.
  • Manage employee expense accounts online to save time and paperwork.

Document your expense report process and include it with the expense account policy. Field questions and assist employees in learning to navigate the process with ease.

If your company’s personnel spend money for work purposes, establish a comprehensive expense policy, create templates, monitor the claims process and adjust as needed. A clear expense process creates trust and respect.

Cook and Company Accountants offer specialized skills in business accounting and asset management, provide expertise in tax planning strategies and can assist you in retaining the value of your company’s estate. Our team of chartered professional accountants are dedicated, knowledgeable and experienced and will provide a personal touch. Contact us for a complimentary consultation.

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How to Minimize the Tax Burden on Your Business Estate

Estate planning for a business owner is complicated as it needs to address intricate personal and business relationships, complex tax issues and business succession. Planning can help you reduce your tax liability, minimize the difficulties faced by your executors and maximize the wealth passed to your heirs. Follow these guidelines to help you minimize the tax burden on your business estate.

  • Start early: Don’t wait for a crisis (illness/death) before consulting with your CPA regarding estate planning.
  • Incorporate your company in order to take advantage of a lower tax rate.
  • Minimize capital gains tax by taking advantage of exemptions.
  • Consider an estate freeze: a strategy in which a business owner transfers assets to their beneficiaries, without triggering tax consequences.
  • Contemplate an early inheritance/gift for your children/grandchildren, providing them with tax-free monies.
  • Consider establishing a trust: a legal arrangement that will help you take advantage of certain tax-planning opportunities/asset protection by transferring shares to family members without losing control.
  • Give loans to family members; interest-free funds to help pay down a mortgage, cover tuition, buy a car or fund a vacation with arrangements for the loan to be forgiven at the time of your death.
  • Set up bequests/donations:  Gifting monies to a charity in your will can shave thousands of dollars off the tax bill for your estate.
  • Purchase life insurance to provide your heirs with a tax-free income for paying taxes on capital gains and other liabilities.
  • Pay dividends to your spouse: As long as your spouse’s income is less than yours, dividends will reduce your family’s overall tax burden.
  • Invest in RRSPs and /or RRIFs to provide immediate access to cash upon your death, helping fund any tax liabilities.

Consult your chartered professional accountant for help in planning your business estate. They will have the credentials, knowledge and experience to help you reduce tax liability and maximize a successful business transfer.

Cook & Company offer specialized skills in business accounting and asset management, provide expertise in tax planning strategies and can assist you in retaining the value of your company’s estate. Our team of chartered professional accountants are dedicated, knowledgeable and experienced and will provide a personal touch. Contact us for a complimentary consultation.

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It’s Never Too Early to Start Preparing for Tax Season

Tax season is a stressful time for most business owners. Preparing to file your business taxes can involve a deep dive for information and a whirlwind of paperwork. A survey by the National Small Business Association discovered that one third of small business owners spend more than 80 hours preparing for federal taxes. Reduce the pressure of tax season by planning ahead, getting organized, developing helpful habits and starting early. Following are tips for reducing the confusion, worry and mayhem of tax season.

 

  • Use accounting software to track income and expenses. Software makes daily data input easy saving time and providing accurate, up-to-date information. Consider using expense categories (i.e. office supplies, restaurant expenses, gasoline, etc.) to improve tracking information.
  • Go paperless by creating electronic copies of all financial documents. Scan receipts or ask for PDF receipts. Download bills from vendors, bank statements and credit card statements. This makes it quick and easy to locate information.
  • Be aware of tax deadlines and mark them on your calendar. Set a reminder of when you need to begin final preparation.
  • Reconcile your bank accounts monthly. Compare each transaction in your bank account to your business records. If errors are detected, deal with them immediately.
  • Take advantage of deductions by carefully recording charitable contributions, staff bonuses, holiday party costs, depreciation of business equipment (vehicles, computers, machinery) capital cost allowance, RRSPs, travel-related expenses and scientific research and experimental development costs. Use the Canadian Business Expense Index to determine what expenses qualify.
  • Seek the help of an experienced CPA and provide them with all necessary information. A CPA will have the knowledge, experience and skill to deal with your tax challenges. They will understand the latest tax reforms, tax preparation and filing procedures and will inform you of what records to keep, how long to keep them and how best to record you business’s transactions. A CPA can answer all your tax questions.

 

Tax time can be simple. Start with good accounting software and use it consistently through the year. Keep clear records of eligible deductions. Reconcile your bank accounts. Employ a CPA and don’t be afraid to ask questions. With good records and professional help, filing your taxes can be an easy and efficient process.

For all your tax needs, contact Cook & Company. Whether you operate a sole proprietorship or a sizable corporation with multiple subsidiaries, Cook and Company use their experience and expertise to make tax time a breeze. Contact us for a consultation.

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When should you get your Accountant involved in End of Life Planning?

End of life planning for a business owner can be a complex and involved process. You need to address family and company needs, consider business and personal assets, navigate complicated tax issues and ensure business succession. Comprehensive estate planning will ease the strain on your family, provide for their needs, reduce tax liability of the business and heirs, preserve the value of the company, ensure liquidity to cover business related costs, and include a plan for succession.

When should you start estate planning for your business?

Ideally, estate planning should begin when your business venture is launched. The evaluation, planning and implementation process that surrounds the starting of a business is a natural beginning point for planning your estate. However, it is never too late to begin end of life planning. The key is simply to begin. Understand that it’s an on-going process that will likely evolve as your needs and your business change.

When should you get your Chartered Professional Accountant involved in end of life planning?

When it comes to the financial intricacies of your business and its future, your Chartered Professional Accountant offers extensive expertise including skills in business accounting and asset management. Your CPA will review your life insurance adequacy, address shareholder agreements, investigate your will and consider estate freezes. Your accountant will help determine the best course of action for your business and your family and should be involved from the initial steps of estate planning.

If you are ready to create an estate plan that will protect the value of your business and ensure your heirs are cared for, get professional advice and assistance from Cook & Company. They will put their experience and expertise to work for you. Contact us today to find out how we can help your business. Call (403) 768-4383 or contact us at [email protected] for a complimentary consultation.

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The Advantages of Hiring a Chartered Professional Accountant

Chartered Professional Accountants (CPAs) are financial advisors who help individuals, businesses, and other organizations plan and reach their financial goals. There are many benefits to hiring these highly educated and experienced individuals.

  • To relieve your work load: Delegating your company’s financial affairs to a CPA will give you
  • more time to focus on other aspects of your business. A CPA can help file tax returns, generate financial reports, establish a budget, ensure GST and HST compliance, provide auditing services, assess risk management, share expert advice and assist with financial, estate and succession planning.
  • To save you money: By using the services of a CPA you will receive assistance with your financial needs without the expense of a salary, office resources, and benefits required for a full-time internal corporate accountant.
  • To put you in control: The financial reports and advice provided by a CPA will give you the information you need to successfully chart the direction of your company.
  • To give you access to expertise: When you hire a CPA you get access to specialized skills, knowledge of finance and experience in corporate finances, tax law, and tax planning.

A CPA has the financial proficiency, strategic vision, and commitment to help your organization succeed. Look for a Chartered Professional Accountant to ensure you are getting the very best advice and service. It is a decision you will not regret.

Whether you operate a sole proprietorship or a sizable corporation with multiple subsidiaries, Cook & Company will put their experience and expertise to work for you. We offer a distinctive approach to accounting and tax advice, with personalized one-on-one service, creative financial solutions and unique strategies to handle everything from income tax planning to financial statement audits and financial planning. Contact us today to find out how we can help your business. Call (403) 768-4383 or contact us at [email protected] for a complimentary consultation.

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How Your Business Strategy and Accounting Should Work Together

The accounting and financial details of your business represent more than just numbers. They represent the fruits of your labour and the heartbeat of your career as an entrepreneur. As such, they should always help inform the strategy that directs the course of your company, but how?

 

Focusing on Important Metrics

 

Metrics of the performance of your company should be integral to the way you formulate and maintain your business strategy. Financial KPIs like net profit and cash flow should be a key part of determining what initiatives or resources your company can invest in moving forward. Measuring operational efficiency can help you determine what goals need to be set regarding the management of your debtors, your inventory, and other elements. Growth indices can help you set and keep tabs on goals for growth, helping you maintain an upward trajectory. In short, understanding the metrics behind your performance is fundamental to your strategic objectives.

 

Marketing and Accounting

 

There are few things as influential over the success of your business as how you market it. Naturally, marketing is an investment that needs to provide returns to your business in the form of new customers and continued loyalty. This is what you’ll get when your business strategy is supported by effective investment in strong approaches to marketing. Financial KPIs like those listed above can in many cases inform what marketing initiatives you invest in and how. Your customer acquisition ratio, for instance, may be useful in determining whether you need to focus on new business or retention, and inform your marketing expenditures accordingly.

 

Having a Strong Financial Plan

 

Financial planning can be one of the most challenging aspects of running a business, but the challenge is well worth it. The more robust a financial plan you have, the more readily and efficiently you can determine the right goals and objectives for your company. Without strong financial planning, the road ahead can be unclear, unpredictable, and riddled with unnecessary risk. Whether you need to determine your pathway into a new market, reimagine your company’s capabilities, or identify and correct errors in your business strategy, a financial plan structured with the help of an experienced CPA will help you every step of the way.

 

The Calgary CPAs here at Cook and Company aren’t just great accountants, they understand the nuances of financial strategy that define the success of a business. When you work with us, you plan for success. Call us at (403) 768-4377 to learn about our financial planning services.